Good morning. My name is Rob, and I'll be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic fourth quarter 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. Thank you. I would now like to turn the call over to Mr. Wayne Wasechek, Vice President and Chief Financial Officer, for opening remarks. Sir, you may proceed. Good morning, and welcome to PotlatchDeltic's fourth quarter 2023 earnings conference call. Joining me on the call is Eric Cremers, PotlatchDeltic's President and Chief Executive Officer. This call will contain forward-looking statements. Please review the warning statements in our press release, on the presentation slides, and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that a reconciliation of non-GAAP measures can be found on our website at www.potlatchdeltic.com. I'll turn the call over to Eric for some comments, and then I will review our fourth quarter results and our 2024 outlook. Well, thank you, Wayne. Good morning, everyone. We reported total adjusted EBITDA of $200 million for 2023 after the market closed yesterday. That is our 5th highest level of annual EBITDA on record since electing REIT status in 2006. We accomplished this despite a relatively weak lumber pricing environment, which reflects our strength as a company created through our past accretive acquisitions and ability to identify and monetize rural acres that have a significant premium to timberland values. Our Timberlands Segment generated adjusted EBITDA of $151 million in 2023. We harvested 7.7 million tons, which is a record annual harvest volume. This volume also reflects our first full year of operations with our CatchMark Timberlands that we acquired in September 2022. Speaking of CatchMark, one of our operational highlights was the completion of the process of insourcing the management of CatchMark's timberlands earlier in 2023, enabling us to realize the final piece in our $21 million of annual CAD synergies from the merger. Our Wood Products segment contributed $20 million of adjusted EBITDA in 2023. We shipped just over 1.1 billion board feet of lumber, which established a new record for the company in annual shipment volume. Our Wood Products team had another strong year in terms of safety performance and successfully completed its capital project plan for the year. Speaking of our capital plan, we continued to remain on track with our $131 million project to modernize and expand our Waldo, Arkansas sawmill. Site preparation and civil work is well underway, with the first phase of equipment installation scheduled to commence later in Q1. The project will increase the mill's annual capacity by 85 million board feet and significantly reduce cash processing costs. The existing mill will continue to operate during the project, with approximately 3 weeks of downtime expected in the mid part of the year to tie in the new equipment, followed by the anticipated completion of the project well before the end of 2024. Our Real Estate segment had a strong year, contributing adjusted EBITDA of $68 million. On the rural side of the business, we sold 18,000 acres at nearly $3,100 an acre. Our real estate team had a strong finish to 2023 by taking advantage of our in-depth stratification of CatchMark's timberlands earlier in the year. For 2023, nearly half of our rural business performance was attributable to the acquired CatchMark portfolio, which is located in excellent real estate markets. Our real estate development business sold 128 residential lots in the Chenal Valley master plan community at an average price of $104,000 per lot in 2023. We also closed on multiple commercial sales, resulting in over $7 million in revenue at an average price of nearly $575,000 per acre. We had good absorption on our residential lot offerings for much of the year, but we have started to see modest signs of slowing in the take-up of our lot offerings by regional builders in Chenal Valley in the fourth quarter. Our team also made good progress on natural climate solutions opportunities this year. We are working through the final stages of the certification process on our nearly 50,000-acre Southern Timberland carbon credit project. We expect to begin pre-marketing efforts in the coming months, with placement and sale of the credits in the marketplace the second half of the year. Regarding solar energy, developers have shown a strong interest in solar opportunities, and we have continued to add to our inventory of solar options under contract. We signed up an additional solar option in Q4 and maintain a robust pipeline of potential additional solar deals. As a reminder, we have nearly $200 million on a net present value basis worth of solar land sale and lease options under contract, representing less than 1% of our timberland acreage ownership. We are focused on assessing additional natural climate solutions opportunities and are optimistic about the growth potential in this area. Although it may take some time for these efforts to bear fruit, we believe that they will lead to an increase in demand for our rural land and drive up timberland values. Moving to capital allocation, we returned $169 million of cash to shareholders in 2023. That amount included $25 million of share repurchases at an average price of $45 per share, which is well below our estimated net asset value. We have an additional $125 million remaining on our existing share repurchase authorization. We follow a disciplined capital allocation strategy and continually evaluate all of our capital allocation opportunities to grow shareholder value over time. Over the course of the year, we have remained very patient and very disciplined surrounding M&A activity, only pursuing opportunities that meet our stringent criteria and that we believe would increase shareholder value. To that end, we just acquired 16,000 acres in Arkansas for $31 million, or about $1,900 per acre, through a privately negotiated one-on-one transaction. These high-quality timberlands are well-stocked, with an average age of approximately 25 years. The acquired timberland portfolio also has strong rural real estate potential, including solar land sale or lease opportunities. Our disciplined, opportunistic, and nimble approach with capital allocation also applies to identifying opportunities to capitalize on higher timberland valuations. As a result, we have entered into an agreement with Forest Investment Associates to sell approximately 34,000 acres of plantation timberlands located in Arkansas and Alabama, with an average age of less than 4 years, for approximately $58 million or $1,700 an acre. This transaction is at a significant premium to our underlying timberland value and is non-dilutive, given the young nature of these trees. This transaction is subject to customary closing conditions and is expected to close in the second quarter of 2024. At the end of the year, we had $230 million of cash on the balance sheet and total liquidity of $529 million. In December, we refinanced our $40 million debt maturity at well below market rates, utilizing our existing forward-starting interest rate swaps, and maintained our weighted average cost of debt at 2.3%, the lowest of the timber REITs. Our strong balance sheet and significant liquidity provides us with flexibility and a solid platform to continue growing shareholder value. Shifting to the housing market, demand for new single-family residential construction continues to remain resilient as single-family starts eclipsed over 1 million starts for the second consecutive month, while the multifamily sector has contracted, driven by new supply coming into the market and the ongoing elevated interest rate environment. A higher proportion of new single-family residential construction is an important lumber demand driver, as single-family starts typically consume three times the amount of wood versus multifamily. Single-family starts have been fueled by momentum in consumer, consumer confidence, a solid labor market, and recently, declining interest rates. These factors, coupled with a historically low level of existing home inventory for sale in the U.S., has prospective home buyers looking to purchase a new home versus an existing home. That said, housing affordability continues to remain a headwind for the housing market. While 30-year fixed mortgage rates have fallen over 100 basis points after hitting a two-decade high in October, breathing some more life back into the housing market, further declines in interest rates are needed to spur incremental demand. Thankfully, many economists are predicting that the Fed will trigger multiple rate cuts in 2024, which would help alleviate affordability challenges. Our longer-term outlook on housing fundamentals remains positive. We believe an underlying shortage of housing stock, due largely to the combination of underbuilding after the Great Financial Crisis and favorable demographics in the form of Millennials, will provide positive tailwinds to the housing market. We continue to expect that U.S. housing starts will return to levels above the long-term average of 1.1 million units per year once homes become more affordable. Turning to the repair and remodel segment, demand in this market has remained steady, backed by strong consumer balance sheets and existing homeowners staying in their homes and fixing up versus moving up to a new home under the backdrop of a higher interest rate environment. Anecdotally, we also continue to experience strong home center takeaway, with our activity up 12% year-over-year. Looking at the longer-term horizon, repair and remodel market fundamentals continue to remain favorable. Our optimism is supported by an aging housing stock, the remote work evolution, and high home equity levels. In summary, the company performed well in a challenging year and made substantial progress on its strategic goals while continuing to remain disciplined on deploying capital. We delivered solid financial results in spite of an economic environment with elevated inflation and high interest rates, which impacted lumber demand and prices. PotlatchDeltic continues to be very well-positioned with an investment-grade balance sheet and a portfolio of high-quality assets. We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in high-return capital projects, acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase program. I will turn it over to Wayne to discuss our fourth quarter results and our 2024 outlook. Thank you, Eric. Starting with page four of the slides, adjusted EBITDA was $41 million in the fourth quarter, compared to $56 million in the third quarter. The quarter-over-quarter decline in EBITDA was primarily due to lower lumber prices, lower index sawlog prices, and seasonally lower harvest volumes in Idaho. These declines were offset in part by strong rural real estate sales. I will now review each of our operating segments and provide more color on our fourth quarter results. Information for our Timberlands segment is displayed on slides five through seven. The segment's adjusted EBITDA decreased from $42 million in the third quarter to $33 million in the fourth quarter. Operationally, our Timberlands team harvested 2 million tons, establishing a record for our fourth quarter harvest volume. Our sawlog harvest in Idaho was 328 million tons in the fourth quarter. This is down seasonally from 377,000 tons that we harvested in the third quarter. Our Idaho sawlog prices were 15% lower on a per ton basis in the fourth quarter compared to the third quarter. The decline in sawlog prices primarily reflects lower prices for index sawlogs. In the South, we harvested 1.7 million tons in the fourth quarter. Favorable weather conditions and good execution by our Southern Timberlands team were key to achieving our harvest level. Our southern sawlog prices were 2% higher in the fourth quarter compared to the third quarter. The increase was primarily driven by a higher mix of larger-diameter sawlogs and slightly higher hardwood sawlog pricing. The Wood Products segment, which is covered on slides eight and nine, had negative adjusted EBITDA of $6 million. Compared to the third quarter, lumber prices were lower, and the charge to write down lumber inventories to net realizable value was $4 million higher. Our average lumber price realization decreased $66 per 1,000 board feet, or 14% in the quarter. This price decrease is comparable to the Random Lengths Framing Lumber Composite on a percentage basis. Our average lumber price realizations per 1,000 board feet were $427 in October, $401 in November, and $417 in December. Lumber shipments increased 9 million board feet from 276 million board feet in the third quarter to 285 million board feet in the fourth quarter. Shifting to Real Estate on slides 10 and 11, the segment's adjusted EBITDA was $22 million in the fourth quarter, compared to $14 million in the third quarter. EBITDA generated by rural sales increased sequentially due to the sale of more acres at a lower average price in the fourth quarter. Our rural real estate performance this quarter is a testament to the robust real estate markets where the CatchMark properties are located and that were stratified earlier in 2023. EBITDA generated by our Chenal Valley master plan community declined slightly in the fourth quarter. We closed the sale of 30 residential lots in the fourth quarter at a higher average price compared to 32 lots in the third quarter. Also, in the fourth quarter, we generated nearly $1 million in commercial revenue, which was comparable to the third quarter. Turning to capital structure, which is summarized on slide 12, our total liquidity was $529 million. This amount includes $230 million of cash on our balance sheet, as well as availability on our undrawn revolver. We refinanced our $40 million of debt that matured in December at an interest rate of approximately 2.5% after patronage credits from lenders. To achieve the below-market rate, we utilized a portion of our outstanding forward-starting interest rate swaps, which lowers our annual interest cost by approximately $500,000. We still have $200 million notional of forward swaps to deploy, which will help us keep our future borrowing costs low. As we previously highlighted in the third quarter call, we repurchased $12 million worth of shares in the fourth quarter at an average price of $45 per share. For the full year, we repurchased 556,000 shares at an average price of $45 per share, or $25 million in the aggregate. This leaves us with $125 million remaining on our $200 million share repurchase authorization. Capital expenditures were $75.79 million in the fourth quarter, which includes $59 million for our Waldo, Arkansas, modernization project. These total expenditures also include real estate development expenditures, which are included in cash from operations and our cash flow statement. I will now provide some high-level outlook comments. The details are presented on Slide 13. We plan to harvest approximately 7.6 million tons in our Timberland segment in 2024, with approximately 80% of the volume in the South. Harvest volumes in the North are planned to be comparable in the first quarter relative to the fourth quarter of 2023. We expect northern sawlog prices to decline about 5% in the first quarter compared to the fourth quarter. In the South, we plan to harvest approximately 1.5 million tons in the first quarter. We expect our southern sawlog prices to decrease modestly, primarily due to seasonally fewer hardwood sawlogs in the mix. We plan to ship 1.1 billion board feet of lumber in 2024. This level of expected shipments includes the impact of downtime at our Waldo, Arkansas sawmill for the modernization and expansion project. In the first quarter, we plan to ship 260 million-270 million board feet of lumber, which incorporates the effect of seasonally lower cut rates in our northern sawmills. Our average lumber price thus far in the first quarter is just slightly higher than our fourth quarter average lumber price. This is based on approximately 100 million board feet of lumber. As a reminder, a $10 per thousand board feet change in lumber price equals approximately $12 million of consolidated EBITDA for us on an annual basis. Shifting to real estate, we expect to sell approximately 51,000 acres of rural land, which includes approximately 34,000 southern acres to Forest Investment Associates, as Eric previously discussed. Also, we expect to sell 130 Chenal Valley residential lots in 2024. Additional real estate details are provided on the slide. We estimate that interest expense will be approximately $1 million in the first quarter and approximately $9 million per quarter for the second, third, and fourth quarters of 2024. Interest expense is lower in the first quarter than the other quarters because that is when we receive our annual patronage payments from the Farm Credit Banks. Also, these amounts are net of estimated interest income, which we expect to be lower in 2024 based on our estimated average cash balance over the course of the year. Turning to capital expenditures, we are planning to spend $100 million-$110 million in 2024, excluding timberland acquisitions. That estimate includes approximately $44 million for the final installments on the Waldo, Arkansas sawmill modernization and expansion project. Also, as Eric mentioned, we already successfully completed an attractive bolt-on timberland acquisition in Arkansas for $31 million this year. We used cash on hand to close this transaction. Overall, we expect our total adjusted EBITDA will be moderately lower in the first quarter relative to the fourth quarter. This is based on the overall expectation of slightly higher average lumber sawlog prices, moderated by fewer rural real estate sales. We continue to remain bullish on industry fundamentals that drive demand in our business. Our integrated operating model and leverage to lumber prices are aligned with those fundamentals, and we are well-positioned to continue growing shareholder value over the long term. That concludes our prepared remarks. Rob, I would now like to open the call to Q&A. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of George Staphos from Bank of America. Your line is open. Hi, everyone, good morning. Thanks for the details. I guess the first question I had is, as we look towards resources and the somewhat reduction in harvest levels, 1Q versus 2, 4Q, is that purely seasonality and tough comps, or is there anything else that we should be mindful of relative to all the other detail that you've shared with us? And then I just wanna make sure I understood. From the slide deck, I think you have sawlog pricing down both in the North and the South in 1Q from 4Q. If that is the consideration with harvest lower, should we expect that timberland also is looking at, you know, lower EBITDA sequentially from 4Q? Yeah, this is Wayne. Yeah, it is seasonal on the volume side, both in the North and the South. You know, keep in mind, in the North, we have spring breakup, which definitely drops the harvest volume in the first quarter, and, you know, that also impacts the second quarter. But, you know, Q4 to Q1, that's the main driver. And then also the same thing in the South. There's just seasonal differences there as well. I think it's, you know, we're looking to harvest volumes that are consistent with, you know, seasonal norms on the volume side. On the pricing side, yeah, when you look to the North, you've got a couple factors there. One, index sawlog pricing is down. You got to keep in mind that you have a one-month lag there, so we're picking up pricing from December through February, so that's impacting the North. Plus, combined with... We have seasonally heavier logs, so that's also bringing down the average price for the North. In the South, you know, it's mostly a mix issue, less hardwood sawlogs in the mix. It's really driving that decrease. You know, comparably, I would say prices are generally flat. Okay. Appreciate that, Wayne. So it wouldn't be unreasonable to expect, we know real estate will be lower. We know timberlands will be lower. Would products at current levels of pricing, recognizing there are no guarantees, and obviously, you know, you hopefully won't have an inventory charge this quarter, are you break even or better from what you can see, given where prices are right now, given where production will be? Or might that still be at a bit of a loss in the first quarter from what you can see right now? No, George, this is Eric. Our expectation is that our mills, in fact, every one of them, is profitable in Q1. Okay, thanks for that, Eric. And then, last question I had for you, you know, certainly seasonality, lower pricing, you know, there were a lot of things that were headwinds that a lot of the wood product companies were facing in the fourth quarter. Your results weren't that different than what we've seen elsewhere so far. Nonetheless, you know, it was a bit of a bracket number in the quarter. Are there any other things aside from, you know, the current, you know, project in Waldo that you're considering in terms of improving, you know, your cost performance and your normalized earnings outlook, no matter the environment in terms of demand and pricing? If so, you know, what sorts of things might we be seeing from Potlatch on that front in the next year or two? Thank you. Yeah, I think. So, George, this is Eric. I'll speak first, and then Wayne can chime in after me. But I think if you look across the business units, so you start with timberlands. We are expecting lower log and haul costs for the year. We have seen rates moderate, particularly in our northern region, up in Idaho. So that'll help provide a little bit of tailwind. In wood products, we think that the outlook for pricing is favorable. First, given the supply and demand dynamic, where you're seeing mill closures, we've seen almost, gosh, 2.3 billion board feet leave the industry in the past 13-14 months. A lot of closures up in BC, Pacific Northwest, and also, you know, down in the South. And we think the demand backdrop is improving as well. We talked about the shift towards single family. We also see, you know, I wouldn't say growth in repair and remodel, but I see stability in repair and remodel, and I see less European imports this year. And if we can see interest rates come down in the back half of the year, I think, you know, again, that supply-demand backdrop is gonna be favorable. And on the real estate side, yeah, Q1 is gonna be a little bit weak. You know, real estate sales are always lumpy. Q2 is gonna be huge with our FIA sale. And just, just to comment on that real fast, you know, we're, we're selling those acres at, we think somewhere between a 3.5% and a 4% IRR to the, to the buyer. And we're redeploying that capital into, some of it anyway, into the Richwood acquisition that's got an 8% IRR. And so that's gonna favorably, impact the, the P&L as well. So some minor puts and takes along the way, but I think the, you know, the big picture in my mind is that the, the backdrop, you know, for our business, which is really lumber demand, is, is favorable. So, on that front end just to finish up, you don't see a need f or sort of any structural or more project-specific cost outs within wood, was really where I was going with that question, given what you can see. Given capacity coming out, the backdrop and so on, that's really where I was going with that question. Thank you. Yeah. So, yeah, so we've really—we've really got, you know, it's not just our Waldo project. We've also got a new log crane going in at our Warren sawmill. We're putting in a new sawmill trim and sort line at our Warren sawmill. You know, those projects are 15%-20% kind of IRR projects, but they're gonna take a year or two to get completed. So we're constantly looking for projects. Frankly, capital projects in our mills offer us some of the highest returns for our, you know, our capital allocation. So we're constantly looking at things, and we do have a few projects underway, but they're gonna take some time. Thank you very much. Your next question comes from the line of Anthony Pettinari from Citigroup. Your line is open. Good morning. Morning. Morning. Hey, you know, when you look at the log prices in 4Q and your expectations for 1Q, I was just wondering if you're seeing, in the southern region, any differential trends between Arkansas and then, you know, sort of the Georgia, South Carolina, Alabama footprint from CatchMark? And then I guess maybe a related question, can you just remind us in terms of hardwood lumber or sorry, hardwood logs, like, what percentage of the harvest that would be, or it seemed like that impacted prices or mix? Can you just kind of maybe dimensionalize that a little bit? Yeah. I think from a regional standpoint on the timberland side, we have. You know, the markets tend to be more tensioned, you know, in the Georgia, South Carolina markets. And with that, you know, we saw earlier in the year, prices, you know, drop a little more there earlier in the year with mills taking economic downtime, delivery quotas. But we've seen that stabilize in all of our markets throughout the year and continuing to improve. So purely on a volume standpoint, you know, we're able to move volume. I think on a pricing standpoint, that's been relatively flat as we've progressed through the year and as we head into Q1. Now, with that, as demand improves, we would see, I think, pricing improve in those more tension markets in the Southeast, and where we've historically seen them. You know, they're not as tensioned for us in a lot of the wood baskets in, you know, Arkansas and Alabama, Mississippi. So pricing, you know, may take a little more time to move there, but, you know, when we do see demand pick up, I think that's where we'll see bigger price increases in that region. Got it. And then, yeah, on the mix side- Hardwood mix. Oh, sorry, go ahead. Hardwood mix. Yeah, for yeah, on the hardwood mix, that's—oh, it, I mean, it's probably in the neighborhood. It's only gone up a couple percentage points, maybe, you know, 5-10 here in the quarter. Got it. Got it. And then just shifting gears, you know, you talked about, I think, monetization of the credit project, I think, in the second half of the year. Just wondering if you could talk about sort of the activities that need to be completed in order to make that happen, and are you working with third parties or marketers, registries? Just sort of anything you can kind of share on the timeline and the steps. Yeah. So we're deep into the process now, Anthony. You know, the first step really is to bring in an auditor that will do the math and prove out to the investing public, if you will, that the credits are for real. And that's a rather lengthy process. And as you can imagine, in this kind of net zero environment that we're in, the demand for these auditors is sky high, and it's not just for timberland projects. It runs a gamut of how you get carbon out of the atmosphere. So these folks, these consulting firms are in very high demand. But if you want to have quality credits, you got to have them audited by an independent third party that's got a good reputation. And so that's the process that we're going through. We expect to have that process done by, I would say, perhaps early in the third quarter. And shortly after we get them verified, we're gonna, we're gonna put them out to bid. And we've lined up Verra, which is one of the two large firms that sell carbon credits around the world. Great reputation, and they're well entrenched in the European market, which is where we think our credits are going to have the most value, and so we expect to monetize those credits shortly after they get the audit comes through, and so that's probably gonna be in the third quarter as well. Okay. That, that's super helpful. I'll turn it over. Okay. Your next question comes from the line of Ketan Mamtora from BMO Capital Markets. Your line is open. Thank you. First question, can you talk a little bit about, you know, some of the capacity curtailments that we've seen in the U.S. South on the sawmill side? Are you surprised that we are seeing capacity curtailments in the U.S. South? And related to that, any impact on your wood basket from the recent Arkansas mill shutdown announcement? No, you know, that's. I wouldn't say I'm modestly surprised about the curtailments in the South. I mean, everybody talks about, you know, cheap fibers in the South. That's a great place to make lumber, much better than up in BC and whatnot, Pacific Northwest. But when you get into some of these, some of these specific wood baskets, like, you know, I think West Fraser, for example, they closed a mill down in Florida. That was a really tight wood basket, and that's a relatively small mill. And same thing when you look at, you know, I think Boise Cascade closed a mill in Alabama, West Fraser closed another one in Huttig, Arkansas. You know, those are smaller mills with tougher cost structures. I'm guessing that capital investment, you know, may not have happened over the years because the owners recognized that long term, the mills couldn't be competitive. So yeah, I, I'm not surprised, I guess, at the end of the day, that some mills have closed in the South. To answer the second part of your question, did the West Fraser mill in Huttig impact us? No, not at all. One of our competitors has got a large block of timberland near that mill, and they were the primary supplier to Huttig, so no impact to us. Understood. No, that's, that's helpful. And then, you know, can you talk a little bit about, you know, sort of, the M&A pipeline on the timberland side? You know, obviously, you did kind of a small bolt-on, but in general, kind of how does the pipeline look right now? Yeah, I tell you, the M&A market is really tight. You know, I'd say typically $3 billion-$4 billion of timberland trades hands each year, and I think something like last year, maybe $1.5 billion traded hands. And I think sellers, they're basically holding off, waiting for maybe housing and lumber prices to improve, perhaps interest rates to come down, or frankly, maybe more importantly, for carbon deals to become more mainstream. And carbon is having a bigger and bigger deal. I think that's one of the takeaways for this call. When you look at the transaction that we had with FIA, it was with the, you know, ultimately, it was a European investor, not FIA, that's gonna own those trees. We sold trees that were, I think, 3.8 years old for $1,700 an acre. You know, what was it? 5 years ago, you'd buy average age timberland in the South for $1,700 an acre. Carbon is having a bigger and bigger deal, and especially if you look at the large sums of capital that have been raised, to pursue timberland for a carbon outcome. You know, and I could, I could reference a bunch. You know, Oak Hill, you know, raised $1.8 billion. They bought 1.7 million acres from Forestland. Manulife said it was raising $500 million for, for timber carbon offsets. JP Morgan acquired Campbell Global, a TIMO, and then, you know, subsequently bought 250,000 acres for $500 million in the South. Goldman Sachs and Apple just raised $200 million for a carbon offset fund. So, you know, I think people are holding off bringing their timberland to market, waiting for this capital to get raised, and then waiting for it to desperately look for a home, because that ultimately is gonna push up timberland values. Got it. No, that's very helpful. I'll, I'll turn it over. Good luck. Your next question comes from the line of Michael Roxland from Truist Securities. Your line is open. Thank you, Eric, and Wayne, for taking my questions. My first question, just can you help me just understand what's happening with respect to margins in wood products? Just following up on what George was asking earlier, 'cause when I look back historically, when there were periods of time when you had lower prices and lower volumes, you still managed to generate mid-single digit, high single-digit EBITDA margins. So I'm just wondering, you know, what is there something going on from a cost vantage point that's negatively impacting your performance in wood product? Well, yeah, certainly, Michael. There is a, you know, in the inflationary environment we've seen over the past year or two, costs of running sawmills have moved up meaningfully. And what you saw this past year, and in particular in the fourth quarter, is with the higher interest rates, you know, demand has dropped. And it dropped to the point where capacity utilization in the industry is at the lowest it's been, I think, since, you know, going back to 2013, is what I read the other day. But whenever you get into a situation in a commodity industry where capacity utilization is at rock bottom levels, you're gonna see prices collapse as everybody tries to keep their mills running full, and subsequently, prices come down. I mean, I am happy that our lumber margins in Q4, while they're negative, I'm certainly not happy about that. If I strip out plywood, we were something like minus 1% in lumber. And I think I've only seen one of our peers report so far, and we did, I would say, meaningfully better than our peers. So it's a tough environment right now, but I think the backdrop is for things to get much better. Got it. Thank you. So that's actually, that's initially coming to me. So when you strip out plywood, actually, lumber is only minus the margin was average was minus 1%, for the quarter? Correct. Got it. Okay. Thank you for that. On Chenal, you mentioned also just seeing a slower take-up by the large builders in 4Q. What are you seeing now from them? Has that accelerated? Because as rates have come down, some of the builders that have been reporting have been showing pretty, pretty good demand in 4Q, and their outlooks have been pretty strong for 2024. So I'm wondering if you've seen that reverse thus far in the quarter. Yeah, Michael, this is Wayne. Yeah, we did have good absorption through most of the year. You know, Q4, that's when we started to see modest signs of slowing there. I think, you know, as we have an outlook into 2024, right now, we're looking at about the same level of sales as we had in 2023. So we're, you know, we are heading into the year with kind of the same same view as coming out of Q4. You know, keep in mind, you know, Chenal, this is one smaller market in Little Rock, Arkansas. It's not a robust real estate market for single-family residentials compared to other, you know, kind of broader metropolitan areas in the South. And additionally, I think also keep in mind that, you know, Chenal market are regional builders. You know, they don't have the same balance sheet or tools available to offer incentives to home builders, compared to large national builders. So these, these regional builders, you know, instead of maybe building eight homes, they might build six, five, you know, and then, like large national home builders, they're not gonna build as many spec homes, anticipating the sale upon completion. So I think that those kind of market dynamics play into it. I think given that they're not, you know, the same balance sheets as large home builders, you know, that they're gonna be a little cautious until rates start to move more. Got it. Thank you, Wayne. And then just one last question. I'd love to get more of a strategic question. You know, you've over the last 18 months or so, we've seen a number of mill closures, line closures. You have Enviva that's contending with a lot of its own problems there, structuring and impact on the demand for pulpwood. So I'm just, you know, when I think about pulpwood in general with the mill closures, line closures, and Enviva, I realize that's less valuable than sawtimber, but it nevertheless helps with, you know, cash flow. How do you think about your rotations, your harvest planning with pulpwood facing this type of, you know, cyclical demand decline to some degree? Yeah, certainly that's an area we're focused on. I think, you know, with these announced closures, you know, as Eric mentioned earlier, you know, we haven't had a direct impact to us. And then you kind of break that down between volume and price. I think from a volume perspective, you know, we continue to move volume, and we have strong relationships with our customers, especially our large customers, and then also with our size and scale, you know, we can move volume to alternative customers. I think, you know, from a volume perspective, you know, certainly we can move it. I think from a pricing dynamic, yeah, clearly, less demand with mill closures creates less demand, and that, that has an overall impact on, on the pricing environment, and that's what we've seen, you know, very, you know, kind of been flat there on the pulpwood side and, you know, heading into Q1, relatively flat still. So I think that's the near term. I think longer term, you know, we're, you know, we've all, you know, we are very active in the market about, you know, what are some longer-term opportunities. You know, right now there's, we're in discussions with a lot of different producers, biomass producers, you know, that from biopower to pellets to, to biofuels, bioplastics, that, you know, would utilize pulpwood, and I think those will create opportunities. Now, this investment will take a bit of time, but we do believe that this will bring more demand and tension to certain wood baskets in the South. Got it. Thank you very much, and good luck in 2024. Thanks. Your next question comes from the line of Matthew McKellar from RBC Capital Markets. Your line is open. Hi, good morning. Thanks for taking my questions. First- Morning. Are you able to comment on what your forest carbon development pipeline looks like beyond this first project you're developing in the south? And maybe comment on how we should be thinking about the pace of project development and delivery looking out beyond 2024. Yeah. So we do have this first project well underway. It's just under 50,000 acres. We're pretty excited about it, 'cause we've built up, like, 3 years of carbon credits and inventory. So the first sale is probably gonna be close to 500,000 credits. We are building our pipeline. We've got a number of acres that we think the highest value or the best value for those acres it's gonna be in a carbon outcome. We want to see how this first project plays out. And, you know, right now, I think we're eyeing maybe another 100,000 acres that could be well suited for a carbon outcome. But, of course, it all depends on the carbon price and the outlook for the carbon price. So the higher we see those prices go, the more acres we're gonna think about have a better outcome for carbon versus traditional timber. So we'll have to see how that develops. Okay, great. Thanks for that. And then, just one more from me. What's your sense here today, of where channel inventory levels sit for wood products as we ramp into the building season? Oh, I think they are just rock bottom levels. You know, I think what's changed over the past couple of years is, you know, especially with the price run-ups that we saw back in 2021 and 2022, dealers just don't want to carry inventories. They want just-in-time deliveries, which is generally why Southern Pine carries a premium over SPF. And I think what's happened here recently is, with the cold weather that's come across the U.S., a lot of job sites were shut down. There's no activity, so dealers went to even lower levels. So I think where we're at right now is just at rock bottom levels. So hopefully with this warmer weather that's showing up, we'll see some buying activity here. Thanks very much. I'll turn it back. Thanks. Thanks. And again, if you would like to ask a question, press star one on your telephone keypad. Your next question comes from a line of Kurt Yinger from D.A. Davidson. Your line is open. Great. Thanks, and good morning, Eric and Wayne. I know that the 34,000-acre disposition, you know, you talked about the young age class profile, but just curious if you could provide any details on maybe harvest levels and any EBITDA contributions from that acreage over the past year, or maybe what you were expecting, you know, in terms of a five-year plan or anything like that. Yeah. So that sale, which was 34,000 acres in total, was split roughly 80% Arkansas, 20% Alabama. As I mentioned, the trees were less than 4 years old, I think 3.8 years old. And they were in a traditional Southern Yellow Pine, plantation-type forestry. They're gonna have virtually... Had we kept those trees, they would have virtually no impact to our harvest profile for the next 22 years. There would have been some thinning along the way at age 14 or 15, but, you know, given where pulpwood prices are, I don't think there's much margin to it. So virtually no impact for 22 years. Then, if you look out to when those trees would reach maturity, the impact is about 300,000-400,000 tons per year for about 6 years. So no impact really for 22 years, and then it's 300,000-400,000 tons per year for about 6 years, and then it drops to zero. So that was the trade-off here. Does that make sense? Yep, that makes sense. Thanks for that. And then, my second question, you know, we've talked about kind of the solar opportunities for a couple of quarters now. You had, you know, one decent-sized sale around that. Just sort of curious how you think about that opportunity with some of these deals in the pipeline in terms of timing and whether you think 2024 could be the year where, you know, the rubber really hits the road, and we see some more material impacts from that. Yeah, that's a great question, Kurt. You know, we did get another solar deal just signed up here, as Wayne mentioned earlier. Our pipeline is big. The outlook for solar has never been greater. You know, if you look at what NextEra Energy says, which is a huge solar developer, or RWE, a big German solar developer, everybody's talking about solar tripling between now and the end of the decade. Now, that being said, to put together a solar farm is a very complicated process, and that's why you, when you go to enter into an agreement with one of these developers, the first step for them is getting land under option. They need to know that they've got a home for their, for their farm, and it needs to meet, you know, the certain attributes, like close to high-power transmission lines and whatnot. But they've got to then go find the equipment, they got to find the panels, which, you know, now you got supply chain issues coming from China. You've got to negotiate offtake agreements, that takes time from utilities. Just a lot of work goes into it. I don't expect 2024 is gonna be the year for a lot of solar farms to have those options get exercised in our portfolio. I think 2025 is gonna be a great year for us. But, you know, we'll see where things are at as we get to the end of the year, and we'll give guidance then. But I think our view is that those developers are gonna pull the trigger starting in 2025. Got it. And is it fair to say that, you know, your preference would still be to primarily lease in those deals as opposed to sell? Or, I guess, as you kind of look across the agreements and what that might entail, you know, which way would you lean, or which way, I guess, would the economics point you? Yeah, we would definitely prefer to lease. We like the long-term income stream. We like the, you know, those things are, they're indexed back to inflation, CPI, what kind of whatnot. But I will tell you that there are some of those developers that refuse to enter into leases. They have to buy. And certainly, given, you know, the price is $10,000 an acre, what have you, we're happy to be a seller if they refuse to lease. So either way, it's a great outcome for us, but our preference is to lease. Got it. Okay, makes sense. Appreciate the color, and good luck here in Q1, guys. Yep, thank you. Your next question comes from the line of Mark Weintraub from Seaport Global. Your line is open. Thank you. A couple follow-ups. So first on the solar, since we're just talking on that, you kind of threw out fine equipment, offtake. Is there a permitting process that needs to happen? And does that tend to happen first? And then I would imagine you do the offtake second, and then find the equipment third. Is that sort of the order things would normally take? Yeah, I can't answer that, Mark. We're not in the development business, but I think certainly getting a permit is part of the process. So do you know if it's on any of the situations where you've got options in place where things might stand on the permitting side? Is that our first window? Yeah, I don't know where they're at with their permits. They tend to be a little quiet with that stuff. What I do know is that when they get a property under option, let's say they get it under option for 4 years, as they get closer and closer to the end of the 4 years. Now, bear in mind that they've been making option payments all along the way, right? It's. They're having to write a check every year to have the property under option. And what they don't wanna have happen is they lose that option, because somebody else might pick it up, and in fact, at a higher price. In fact, that happened this past year. We had one expire, and we went out and found another partner for the tract, and they, they put the land under option at a meaningfully higher price. So I think what happens is the pressure builds as you get to the end of the option period, and that's when they wanna get all their ducks lined up to pull the trigger. That's typically how it works, but we don't have, you know, great insight as to what their plans are. Fair enough. And since we're kind of on the carbon type of topic here, do you guys have anything on the CCS side, which obviously both Weyerhaeuser and Rayonier have talked about a fair bit or because of location and the such like, is it likely a less bigger factor for you? No, I don't. Well, it may be a little bit of a less bigger factor for us, given where we're at, in Arkansas, as opposed to, you know, Weyerhaeuser's got ground down in Louisiana, Texas, whatnot. But we definitely have projects underway in CCS, but we're under an NDA, so we can't really talk about them. But there's certainly a lot of work going on in that area, and, you know, I would expect over the coming quarters, we'll have, we'll have more to say as things, things come to fruition. Okay, super. And then on the wood products, you'd made the comment about being profitable in 1Q. Just wanted to clarify, was that EBITDA? Was that operating profit? And does that build in the expectation which you laid out why you'd have it, but that lumber prices would probably be going higher, or is that at where prices are today? Yeah, no, I would say it's an EBITDA kind of a number. And yeah, I think it's primarily driven by improved lumber prices. Okay. And then, I guess kind of—Well, maybe one more on lumber, if I could, and then, you know, you talked about the significant reduction in cash costs related to Waldo. And I think you've talked about the specifics before, but can you remind us, you know, how much of that might show up this year, and then how much, you know, additional, would, you know, be still in the hat for next year? Well, I would say, you know, our shipments are gonna be down at Waldo this year. We just have way too much work going on, and I think it's something like 30 million feet we're gonna lose at Waldo because of the project. So we're not gonna see those benefits this year. It's gonna be next year. And really, it's gonna be Q2 and Q3 that take the hit on shipments. You know, we'll start the year out, just to give you a sense of it, we're gonna start the year out with 51 million feet we expect in Q1, dropping to 41 in Q2, and then 19 million feet in Q3, and then up to 54 million feet in Q4. But by the end of the year, we're only- we only expect to be at about 80% of where the mill is gonna get to eventually. And it's gonna take us until probably Q3 of 2025, to where we've got the mill running at 100% of capacity. And, you know, the BID Group, who's our contractor for this, this project, they've done a number of mills, as you know, in the South, and they've got a lot of data on the ramp curve for, for mills with projects like this, brownfield expansions. And it's fairly well documented, and surprisingly, the range is pretty tight, on, on, like, first quartile versus fourth quartile mill expansions like this. We expect to be improving, but it's gonna take a good year to get it fully ironed out. Okay. And then lastly, maybe if you could just help us a little bit. So you sold some land at $1,700, explained, you know, why the price was low given the age class. You bought land at $1,900 with a more even type age class. And you know, and at the same time, you've been talking about how you've been buying back stock, and in part, it's a big discount to NAV. Yet sort of those $1,700, $1,900 type numbers don't necessarily correspond to kinda how most of us are thinking on a NAV. So you sort of explained the $1,700. Maybe if you talk a little bit about the $1,900, and then maybe where. You know, you talked about three years ago, maybe 1,700 was representative of an average age class U.S. timberland holding. Do you have a perspective on where that would be today? Well, I would, I would tell you, I would not characterize the acquisition that we made, the 16,000 acres in Arkansas for $31 million or $1,900 an acre. That was not an even- aged forest. That was a mature forest, average age 25. So we will be harvesting those trees over the next 4-5 years. That was a privately negotiated transaction, one-on-one, and we think we're gonna earn an 8% IRR on that project, which is unheard of in timberland M&A circles. And we got that return because it was a privately negotiated transaction, just like we did with Loutre, pretty much like we did with CatchMark, pretty much like we did with Deltic way back when. So, Mark, I think to answer the second part of your question, where do I think timberland values are today if we brought an even-aged tract to the market, what do I think we could get? I think it depends upon the individual area, but I'd say probably somewhere between $2,500-$3,000 an acre, depending upon where it might sit. Somewhere in that zip code. All right. Well, thank you for, for all the insights. Yep, you're welcome. At this time, I'm showing there are no more questions. I'll now turn the call back over to Wayne Wasechek. Thank you for your questions and your interest in PotlatchDeltic. That concludes our call.